ANNEX to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year ending March 31, 2014

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2014, and all information contained in these statements rests with the management of Infrastructure Canada. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of Infrastructure Canada's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in Infrastructure Canada's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout Infrastructure Canada and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. A risk-based assessment of the system of ICFR for the year ended March 31, 2014 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The effectiveness and adequacy of Infrastructure Canada's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of Infrastructure Canada's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Deputy Head of Infrastructure Canada.

The financial statements of Infrastructure Canada have not been audited.

The accompanying notes form an integral part of these financial statements.

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and objectives

The Office of Infrastructure of Canada (INFC) was created in 2002 as a separate organization under Schedule I.1 of the Financial Administration Act. The applied name for this organization is Infrastructure Canada.

INFC is funded through annual and statutory appropriations received from the Parliament of Canada and is not taxable under the provisions of the Income Tax Act. INFC reports to the Minister of Infrastructure, Communities and Intergovernmental Affairs, and Minister of the Economic Development Agency of Canada for the Regions of Quebec.

INFC was established to lead the Government of Canada's effort to address infrastructure challenges through strategic investments in provincial, territorial and municipal assets, engagement in key partnerships, and the development and implementation of sound policies. Order in Council 2004-325 authorizes the Minister to enter into transfer payment agreements and contracts related to infrastructure initiatives in Canada.

The responsibility for the New Bridge for the St. Lawrence Corridor Project and oversight of the Jacques Cartier Champlain Bridge Incorporated was transferred from the Minister of Transport to the Minister of Infrastructure, Communities and Intergovernmental Affairs, and Minister of the Economic Development Agency of Canada for the Regions of Quebec on February 13, 2014.

INFC delivers its mandate under two strategic outcomes and internal services. INFC outcomes are described below.

Provinces, territories and municipalities have federal financial support for their infrastructure priorities: Provides federal transfers to provincial, territorial and municipal governments for their infrastructure priorities in order to help maintain a high level of quality core public infrastructure across the country. The program activities under this strategic outcome are: Provincial-Territorial Infrastructure Base Fund and Gas Tax Fund.

Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided: Provides targeted project-specific investments to address federal/provincial priorities in both large and small communities as well as large strategic investments of national and regional benefit. The program activities under this strategic outcome are: Building Canada Fund-Communities Component, Building Canada Fund-Major Infrastructure Component, Green Infrastructure Fund, Canada Strategic Infrastructure Fund, Municipal Rural Infrastructure Fund, Border Infrastructure Fund and Economic Analysis and Research.

Internal services: Internal Services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of INFC. Internal Services include only those activities and resources that apply across INFC, not those provided specifically to a program.

The New Bridge for the St. Lawrence Corridor Project was not part of Infrastructure Canada's Program Alignment Architecture structure in 2013-2014, for reporting purposes it is being reported under the program activity of Building Canada Fund–Major Infrastructure Component (BCF–MIC). It should be noted that BCF–MIC is a contribution program, the New Bridge for the St. Lawrence Corridor Project is a major capital project, and its spending has no relation to contributions or transfer payment programs.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

Parliamentary appropriations – INFC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to INFC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2013-14 Report on Plans and Priorities.

Net cash provided by government – INFC operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by INFC is deposited to the CRF and all cash disbursements made by INFC are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that INFC is entitled to draw from the CRF without further authorities to discharge its liabilities.

Expenses – Expenses are recorded on an accrual basis.

Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

Services provided without charge by other government departments for accommodation, and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.

Employee future benefits:

Pension benefits: Eligible employees participate in the Public Service Pension Plan (Public Service Superannuation Act), a multi-employer plan administered by the Government. INFC's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. INFC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

Tangible capital assets – All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset class

Amortization period

Informatics Hardware

5 to 10 years

Informatics Software – Purchased and Developed

3 to 7 years

Leasehold Improvements

period of lease

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

Contingent liabilities – Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

Measurement uncertainty – The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the payables at year end, liability for contingent liabilities, employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

INFC receives its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, INFC has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to current year appropriations used

(in thousands of dollars)

2014

2013

Net cost of operations before government funding and transfers

3,516,195

3,750,210

Adjustments for items affecting net cost of operations but not affecting authorities:

Amortization of tangible capital assets

(1,483)

(763)

Services provided without charge by other government departments

(5,491)

(2,754)

Decrease in vacation pay and leave

71

16

Decrease in employee future benefits

553

2,263

Other charges not charged to the authorities

-

-

Refund of previous year's expenditures

2,722

2,054

Total items affecting net cost of operations but not affecting authorities

3,512,567

3,751,026

Adjustments for items not affecting net cost of operations but affecting authorities:

Acquisitions of tangible capital assets

1,258

1,630

Total items not affecting net cost of operations but affecting authorities

1,258

1,630

Current year authorities used

3,513,825

3,752,656

b) Authorities provided and used

(in thousands of dollars)

2014

2013

Authorities

Vote 1 – Operating Expenditures

55,183

56,098

Vote 5 – Contributions

4,102,031

5,153,951

Statutory Amounts

Employee Benefit Plan

4,393

4,799

Green Infrastructure Fund

-

99,418

Less:

Lapsed: Operating

(8,974)

(10,477)

Lapsed: Contributions

(638,808)

(1,551,133)

Current year authorities used

3,513,825

3,752,656

The responsibility for the New Bridge for the St. Lawrence (NBSL) Corridor Project was transferred from the Minister of Transport to the Minister of Infrastructure, Communities and Intergovernmental Affairs on February 13, 2014.

The Total Authorities Available for Use for the Building Canada Fund-Major Infrastructure Component (BCF–MIC) in 2013-2014 was increased by $8,246,357 to include NBSL for the period of February 13, 2014 to March 31, 2014. As well, BCF–MIC Actual Spending for 2013-2014 includes the NBSL expenditures of $8,246,357 for the same period.

4. Accounts payable and accrued liabilities

(in thousands of dollars)

2014

2013

Accounts Payable – Other government departments and agencies

234

8,211

Accounts Payable – External parties

304,848

399,441

Total accounts payable

305,082

407,652

Accrued Liabilities

348

193

Total accounts payable and accrued liabilities

305,430

407,845

5. Employee future benefits

a) Pension benefits

INFC's employees participate in the public service pension plan (the "Plan"), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and INFC contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to EAP 2012, employee contributors have been divided into two groups – Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

The 2013-2014 expense amounts to $3,088,596 ($3,426,688 in 2012-2013). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-2013) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-2013) the employee contributions.

INFC's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

b) Severance benefits

INFC provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

7. Tangible capital assets

8. Contractual obligations

9. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

a) Claims and litigation

Claims have been made against Infrastructure Canada in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Infrastructure Canada will record an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $390,000 ($400,000 in 2012-13) at March 31, 2014.

10. Related party transactions

INFC is related as a result of common ownership to all Government departments, agencies, and Crown corporations. INFC enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, INFC received common services which were obtained without charge from other Government departments as disclosed below.

a) Common services provided without charge by other government departments

During the year, INFC received services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in INFC's Statement of Operations and Departmental Net Financial Position as follows:

(in thousands of dollars)

2014

2013

Employer's contribution to the health and dental insurance plan

2,447

2,630

Accommodation

3,044

124

Total

5,491

2,754

The Government has centralized some of its administrative activities for efficiency and cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in INFC's Statement of Operations and Departmental Net Financial Position.

b) Other transactions with related parties

(in thousands of dollars)

2014

2013

Accounts receivable – Other government departments and agencies

123,598

9,312

Accounts payable – Other government departments and agencies

234

8,211

Expenses – Other government departments and agencies

6,436

8,460

Expenses disclosed in (b) exclude common services provided without charges, which are already disclosed in (a).

Other Government Departments (OGDs) and agencies administer certain programs on behalf of INFC. Funds are advanced to these OGDs and agencies, namely Transport Canada and the Regional Development Agencies, during the fiscal year. An accounts receivable is recorded for the unused portion that will be returned to INFC after year end while an accounts payable is recorded when INFC must provide additional funds to these OGDs and agencies.

11. Transfer from another government department

Effective February 13, 2014, Infrastructure Canada was transferred the responsibility for the New Bridge for the St. Lawrence Corridor Project and oversight of Jacques Cartier Champlain Bridge Incorporated in accordance with Order-in-Council 2014-0144, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, Infrastructure Canada received the following liabilities related to the New Bridge for the St. Lawrence Corridor Project and oversight of Jacques Cartier Champlain Bridge Incorporated from Transport Canada on February 13, 2014:

12. Segmented information

ANNEX to the Statement of Management Responsibility Including Internal Control over Financial Reporting for the Fiscal Year ending March 31, 2014

Note to Reader

1. Introduction

This document provides summary information on the measures taken by Infrastructure Canada to design, assess and maintain an effective system of internal control over financial reporting (ICFR) including information on internal control management and assessment results and related action plans.

Detailed information on Infrastructure Canada's authority, mandate, and program activities can be found in its 2013-14 Report on Plans and Priorities and 2013-14 Departmental Performance Report.

2. Departmental system of internal control over financial reporting

2.1 Internal control management

Infrastructure Canada has a well-established governance and accountability structure to support departmental assessment efforts and oversight of its system of internal control. A departmental internal control management framework, approved by the Deputy Head, is in place and includes:

Organizational accountability structures as they relate to internal control management to support sound financial management, including roles and responsibilities of senior managers in their areas of responsibility for control management;

Values and ethics;

Ongoing communication and training on statutory requirements, and policies and procedures for sound financial management and control; and

At least semi-annual monitoring of and regular updates on internal control management, as well as the provision of related assessment results and action plans to the Deputy Head and departmental senior management and, as applicable, the Departmental Audit Committee.

The Departmental Audit Committee (DAC) provides advice to the Deputy Head on the adequacy and functioning of the department's risk management, control and governance frameworks and processes. DAC is comprised of three external members and meets up to four times per year and more frequently as required.

2.2 Service arrangements relevant to financial statements

Infrastructure Canada relies on other organizations for the processing of certain transactions that are recorded in its financial statements:

Common Arrangements

Public Works and Government Services Canada (PWGSC) centrally administers the payments of salaries and the procurement of some goods and services in accordance with the Infrastructure Canada Delegation of Authority, and provides accommodation services;

The Treasury Board Secretariat provides Infrastructure Canada with information used to calculate various accruals and allowances, such as the accrued severance liability and employee benefit plan, and pays the employer's contribution to the health and dental insurance plans;

The Department of Justice provides legal services to Infrastructure Canada; and Shared Services Canada (SSC) provides information technology (IT) infrastructure services to Infrastructure Canada in the areas of data centre and network services. The scope and responsibilities are addressed in the interdepartmental arrangement between SSC and Infrastructure Canada.

Specific Arrangements

Industry Canada is the host of Infrastructure Canada's departmental financial management system, the Integrated Financial Management System (IFMS). The service arrangement also includes system support.

Infrastructure Canada acquires pay compensation services from PWGSC.

Federal delivery partners (Transport Canada, Atlantic Canada Opportunities Agency, Western Economic Diversification Canada, Federal Economic Development Agency for Southern Ontario, Economic Development Agency of Canada for the Regions of Quebec, and the Canadian Northern Economic Development Agency) manage certain contribution programs on behalf of Infrastructure Canada.

Infrastructure Canada's security services are acquired through an arrangement with Citizenship and Immigration Canada.

3. Departmental assessment results during fiscal year 2013-2014

During 2013-14, Infrastructure Canada has completed its first full assessment of both design and operating effectiveness of ICFR. The assessment was completed across the entity, business process and IT general control areas.

3.1 Design effectiveness testing of key controls

In the current year, Infrastructure Canada has completed the documentation and design effectiveness assessment of its Entity-Level Controls (ELCs). As a result of this work, the department has identified the following remediation required:

Roles and responsibilities and terms of reference will be refined and documented for certain oversight positions and committees to ensure consistency of operation.

Infrastructure Canada has also completed the documentation and design effectiveness assessment of its IT general controls (ITGCs). The general controls around information systems and technology are a critical component of the internal control framework. As a result of this design effectiveness work, Infrastructure Canada has identified the following design remediation actions:

The key focus for ITGCs in 2014-15 will be identification of evidence to support control design. One of the systems, Financial Planning and Analysis Application – Shared Information Management System for Infrastructure (FPAA/SIMSI) was limited in the historic information that could be produced to support the logical access and change management controls, therefore preventing a full assessment in 2013-14.

As a result of the design effectiveness assessment of the business process controls the following remediation items have been identified:

The majority of design related control findings at the business process level were the result of inadequately defined control evidence. From a design standpoint remediation actions should focus on providing a clear and consistent expectation for the evidence (form and timeliness) for each control to allow for successful assessment of control operation.

Controls were identified wherein the individual performing the control or information being used does not provide the appropriate basis for the control to operate effectively. Remediation of these controls will require Infrastructure Canada to revisit the responsibilities and timing of control performance to correct design deficiencies.

3.2 Operating effectiveness testing of key controls

During 2013-14 Infrastructure Canada has completed its initial assessment of operating effectiveness for all identified key controls across the entity, business process and IT general control areas. Findings from the operational effectiveness testing and related areas for remediation are summarized below:

Entity level controls

Evidence to support the operation of certain committees and sub-committees could not be identified. Infrastructure Canada will need to focus on documenting the results of these oversight committees to ensure appropriate evidence of control operation is retained.

Consistency of control operation must also be addressed to ensure they operate as designed without exception.

IT General controls

Limitations on the evidence available to support control operation for the FPAA/SIMSI application prevented operational effectiveness testing in 2013-14. The focus in future periods will be testing the controls throughout the period to ensure evidence is available.

Logical access controls over the FPAA/SIMSI application were not operating as designed, however Infrastructure Canada has validated that risks related to the finding did not materialize during the year through substantively testing underlying details.

Change management in FPAA/SIMSI was not actively monitored at all points during the year. This is mitigated however by strong preventative controls which reduce the risk of unknown projects, changes or enhancements proceeding without proper approval).

Business process controls

The majority of operational control findings were the result of inconsistency in or the non-existence of evidence. This differs from the design effectiveness findings wherein the control was appropriately described but did not consistently produce the expected results. Infrastructure Canada will focus on educating all control owners that operation must occur without exception.

In one instance a control failed to operate in the anticipated timing (i.e. before the underlying transaction occurred). Infrastructure Canada will ensure that all controls operate as designed, including the timing, nature and extent of the control.

3.3 On-going monitoring of key controls

Following the first full assessment of design and operational effectiveness testing, Infrastructure Canada has developed a multi-year risk based plan for ongoing monitoring of key controls beyond 2013-14. In accordance with this plan the design and operating effectiveness assessments will be performed as follows:

Design effectiveness

In each fiscal year, Infrastructure Canada will at minimum assess the need to update the design of its key controls across the three areas (entity level, business processes and IT general controls) through performance of a walkthrough.

Operational effectiveness

Infrastructure Canada plans to use a rotational basis for testing the operational effectiveness of its key controls over financial reporting. The approach for each area is described below and detailed further in section 4.2 below.

Entity level controls:

Infrastructure Canada will assess the operating effectiveness of entity level controls each year given the importance of these overarching "tone at the top" controls.

Business process controls:

Infrastructure Canada will rotate the testing of business process controls based on the table detailed in section 4.2. The rotational basis is subject to revision annually based on the results of prior year testing and/or any changes to key controls during the year of assessment.

IT General controls:

Infrastructure Canada will assess the operating effectiveness of the IT general controls (logical access and change management) annually given the importance and reliance on key financial systems.

The risk based plan is subject to review and adjustment each year as factors change in response to new developments or findings from previous testing and remediation actions.

4. Departmental Action Plan

4.1 Progress during fiscal year 2013-2014

During 2013-14, Infrastructure Canada has completed its design and operating effectiveness assessments of the internal controls over financial reporting. Below is a summary of the planned and actual main progress achieved by Infrastructure Canada based on plans identified in the previous fiscal year's annex:

Elements in action plan

2013-14 status

Document the processes and controls:

Transfer Payments

The transfer payment processes (internal and other government department managed transfers) has been fully documented, including risk and control matrices.

Payroll

The payroll process has been fully documented, including risk and control matrices.

Procure-to-Payment

The procure-to-payment process has been fully documented, including risk and control matrices.

Financial Statement Preparation

The financial statement preparation process has been fully documented, including risk and control matrices.

IT general controls

The IT general controls (logical access and change management)have been fully documented, including risk and control matrices.

Entity level controls

The financial statement preparation process has been fully documented, including risk and control matrices.

Perform Design effectiveness assessment:

Transfer Payments

The transfer payment process controls have been walked through and assessed for design effectiveness.

Procure-to-Payment

The payroll process controls have been walked through and assessed for design effectiveness.

Payroll

The procure-to-payment process controls have been walked through and assessed for design effectiveness.

Financial Statement Preparation

The financial statement preparation process controls have been walked through and assessed for design effectiveness.

IT general controls

The IT general controls (logical access and change management) have been walked through and assessed for design effectiveness.

Entity level controls

The entity level controls have been assessed for design effectiveness and walked through.

Testing of Operational Effectiveness

Transfer Payments

The transfer payment process controls have been tested for operational effectiveness based on the frequency and nature, extent and timing of the underlying controls.

Procure-to-Payment

The payroll process controls have been walked through and assessed for design effectiveness.

Payroll

The procure-to-payment process controls have been tested for operational effectiveness based on the frequency and nature, extent and timing of the underlying controls.

Financial Statement Preparation

The financial statement preparation process controls have been tested for operational effectiveness based on the frequency and nature, extent and timing of the underlying controls.

IT general controls

The IT general controls (logical access and change management) have been tested for operational effectiveness based on the frequency and nature, extent and timing of the underlying controls.

Entity level controls

The entity level controls have been tested for operational effectiveness based on the frequency and nature, extent and timing of the underlying controls.

4.2 Action plan for the next fiscal year and subsequent years

Building on the successful completion of the department's first complete assessment of design and operating effectiveness of key controls, Infrastructure Canada will be applying its rotational on-going monitoring plan to reassess control performance on a risk basis across all control areas. The status and action plan for the completion of the identified control areas for the next fiscal year are reflected in the table below: